Category Archives: Financial Planning

It is almost a cliché to say medical costs have rocketed over the years. We all tend to spend a lot of time and energy to save money for the future to fulfil our various goals like children’s education, retirement, home purchase and others. We generally don’t give as much thought to medical exigencies as required.

Considering, if one does not have a proper medical cover, expenses on medical emergencies can drain out his savings and even put a person in debt. This means your entire future goals can get compromised by not having a proper medical cover. Medical emergencies don’t announce themselves in advance before striking. Therefore, the only thing to do is to be prepared.

For this, you must start by assessing how much cover would be required and look at the probability of covering most events. A Rs 5 lakh cover for an adult should cover 85 – 90 per cent of medical situations. The right approach would be to transfer risk by taking an appropriate medical insurance cover and being prepared to spend if expenses overshoot the same. A normal medical insurance policy covers hospitalisation and also includes an exhaustive list of day care procedures. They also cover domiciliary hospitalisation and pre- and post hospitalisation medical expenses. In some cases even hospital daily cash and health check-up expense reimbursement may be included. These days most policies allow cashless settlement of all the claims.

Points to be taken in considerations:

Prior to buying medical insurance, start by assessing the cover needed and look at the probability of covering most ailments

Build a corpus to foot expenses if medical cover falls short

Choose a medical cover based on premium outgo, claim settlement record of the insurer and policy benefits

Premium alone cannot be the sole consideration for choosing the policy. Claim settlement is of paramount importance. If your insurer of choice has a history of processing claims fast and the policy benefits, too, are good, this insurer’s policy should definitely make it to your policy shortlist.

There are people who prefer floaters, which are comparatively cheaper. The benefits are similar, but there is one umbrella cover for the entire family. For a smaller premium, one will have to assume higher risks.

Many who are employed enjoy cover from their employers. This would be a group insurance cover, that generally tends to be more beneficial than a general medical insurance policy. The premium in a group medical insurance policy are also lower as compared to normal policies.

There is one major downside to it though this cover ceases when one leaves employment. Today, when people are mobile and change jobs frequently, this can become a problem. When a person is in transition from one job to another, there may not be any cover at all. This is a pitfall of depending on a group medical cover.

Also, the next employer may or may not have a medical cover as comprehensive. Hence, it is always a good idea to have a separate medical cover, even if you already have one. The separate cover can be at an appropriately lower level.